介绍： Wells Fargo’s boss stands down: Stumpfed
What a scandal says about Americans’ attitude towards banks
From The Economist 20161015

Audio:

5:31



Retired hurt
WHEN you consider the hundreds of billions of dollars of losses and fines that the banking industry has made or incurred over the past decade, the ...

介绍： Wells Fargo’s boss stands down: Stumpfed
What a scandal says about Americans’ attitude towards banks
From The Economist 20161015

Audio:

5:31



Retired hurt
WHEN you consider the hundreds of billions of dollars of losses and fines that the banking industry has made or incurred over the past decade, the affair that has just ended the career of John Stumpf, the boss of Wells Fargo, may at first seem innocuous. In September Wells admitted that its retail-banking sales people had been too pushy, and agreed to pay regulators a $185m fine, a tiny sum by recent standards (Deutsche Bank is presently in negotiations to pay a fine of perhaps $5 billion to American regulators). Mr Stumpf probably thought that he had a couple more happy years to go as the head of the world’s most valuable bank.

But on October 12th, he stepped down after being roasted alive for weeks in an inferno of criticism. Wells’s transgressions have caught the public mood far more than esoteric abuses in the mortgage-backed-security market ever did. The bank admitted that its staff created up to 2m bogus accounts, without customers’ permission, in order to meet aggressive sales targets. To many Americans fed up with banks’ red tape and lousy service that seemed reckless, unforgivable and possibly criminal.

Wells had already sacrificed some lambs, having fired over 5,000 employees involved in the fake accounts, and engineered the retirement, in July, of the executive in charge of its retail arm. But over the course of the past month the pressure grew on Mr Stumpf, who forfeited $41m in compensation. He was savaged in a congressional hearing, where he said that he, as chief executive, was accountable to the board, of which he was chairman. Politicians asked why bank regulators took the mass fabrication of accounts so lightly. Chicago’s city council said it would boycott the bank. Eventually the episode began to squeeze the bank where it really hurt: its share price. Wells’s market capitalisation has dropped by $25 billion since the start of September, and it has lost the global top spot to JPMorganChase.

Wells will hope that the scandal will now pass. Mr Stumpf has been replaced as chief executive by Tim Sloan, a bank veteran. Unusually for a big American bank, it will now have a non-executive chairman, Stephen Sanger. Despite the fake accounts scandal, the bank is in decent condition. It sailed through the 2008-10 crisis, buying a distressed competitor, Wachovia, and is profitable and well capitalised. It is relatively simple and focused on America.


Even so, investigations and legal cases relating to the affair will simmer for years. The hostility comes from both left and right. Elizabeth Warren, a left-wing senator, has denounced the bank in furious terms. But so has Jeb Hensarling, a libertarian congressman in charge of the House Financial Services Committee, who has previously argued that banks are over-regulated. He has said his committee’s inquiry into the bank will continue.

For the rest of the industry, the Wells affair has three lessons. First, the cumulative effect of bank scandals and a mood of populism means that the environment may still be as dangerous as immediately after the 2008-10 crisis. Investors are worried that scandals they once would have viewed as minor can spiral out of control. A mesh of litigation, boycotts and bad publicity can damage long-term profits.

Second, banks may need to make their boards more independent, to create a firebreak when executives mess up. Wells Fargo is not the first big bank to split the chairman and chief-executive roles—Citigroup did in 2007. But JPMorganChase, Morgan Stanley, Bank of America and Goldman Sachs are still ruled by all-powerful figures, such as Jamie Dimon (JPMorganChase) and James Gorman (Morgan Stanley). That is now harder to justify.

The final lesson is for those all-powerful figures. Mr Stumpf was a highly regarded figure in the industry, and Wells viewed as a well-run firm. Yet, at best, he seems to have been unable to control the workings of his organisation, with its $2 trillion balance-sheet and 265,000 staff. Several other banks are as big as Wells and almost all are more complex than it, straddling lots of different countries. It seems unlikely that Wells Fargo is the only one that has become a nightmare to manage.


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